Sarchuk,
T.C.J.:
—The
appeal
of
L.B.
Farms
Ltd.
is
from
reassessments
of
tax
for
its
1980
and
1981
taxation
years.
The
reassessments
arise
out
of
the
sale
by
the
appellant
in
1980
of
five
quarter
sections
of
land
located
near
the
southeast
limits
of
the
City
of
Saskatoon
("the
City”).
In
its
return
of
income
for
the
1980
taxation
year
the
appellant
reported
an
adjusted
cost
base
in
1971,
based
on
an
estimated
fair
market
value
of
the
land,
of
$975,000
or
$1,344
per
acre.
The
respondent
reassessed
on
the
basis
that
the
value
of
the
said
land
(without
buildings)
on
December
31,
1971
was
not
more
than
$232,000
or
$320
per
acre
and
that
the
adjusted
cost
base
of
the
land
was,
inclusive
of
selling
cost,
$297,328.
Reassessments
were
issued
both
for
the
1980
and
1981
taxation
years
reflecting
the
fact
that
a
substantial
capital
gain
reserve
was
claimed
by
the
appellant
in
1980
and
the
fact
that
a
substantial
portion
of
the
capital
gain
was
taxable
in
the
1981
taxation
year.
The
issue
before
the
Court
is
whether
the
respondent
erred
in
his
determination
of
the
fair
market
value
of
the
property
in
question
as
at
December
31,
1971
and
if
he
did,
whether
the
true
fair
market
value
at
that
date
was
as
alleged
by
the
appellant.
Appraisal
reports
and
estimates
of
fair
market
value
were
presented
to
the
Court
by
three
expert
witnesses,
each
of
whom
based
his
final
conclusion
as
to
value
on
the
market
data
approach.
The
respondent
called
Mr.
S.A.
Helmers,
an
employee
of
Revenue
Canada,
Taxation
and
a
real
estate
appraiser.
In
May
1983
he
became
qualified
to
use
the
Canadian
Residential
Appraiser
(CRA)
designation,
and
in
May
1986
he
was
granted
the
right
to
use
the
designation
Accredited
Appraiser
Canadian
Institute
(AACI).
His
prior
experience
included
four
years
as
a
mortgage
real
estate
appraiser
and
six
years'
employment
as
a
real
estate
appraiser
in
private
industry.
He
has
been
employed
by
the
respondent
since
1984.
His
qualifications
as
an
expert
were
not
disputed
by
the
appellant.
Expert
evidence
was
presented
on
behalf
of
the
appellant
by
Sylvan
D.
Chyz
and
Ms.
J.L.
Dyck.
Mr.
Chyz
has
been
an
accredited
member
of
the
Appraisal
Institute
of
Canada
since
1974,
and
practises
his
profession
with
Chyz
Appraisals
Ltd.
in
Saskatoon.
He
has
given
expert
evidence
in
various
courts
on
many
occasions
and
his
qualifications
were
not
challenged
by
counsel
for
the
Minister.
Ms.
Dyck
is
an
agricultural
appraiser
and
consultant
with
Deloitte,
Haskins
&
Sells
Associates,
Management
Consultants,
Saskatoon.
Ms.
Dyck
does
not
have
accreditation
as
an
appraiser.
She
is
a
Professional
Agrologist
and
holds
a
Bachelor
of
Science
degree
in
agriculture
from
the
University
of
Saskatchewan.
She
has
been
active
in
the
real
estate
appraisal
field
since
1980,
first
with
Brunson
&
Associates
Ltd.
and
since
November
1985
with
Deloitte,
Haskins
&
Sells.
Her
principal
qualifications
and
professional
memberships
are
related
to
the
agricultural
industry.
The
subject
property
is
described
as
Section
17-36-4-W3
and
the
SE
quarter
of
Section
18-36-4-W3.
At
the
effective
date
the
property
was
situated
within
the
Rural
Municipality
of
Corman
Park
and
consisted
of
approximately
725
acres
of
farm
land
with
a
zoning
designation
of
A3
—
Agricultural
Large
Acreage
Zone.
The
west
boundary
of
the
SE
quarter
of
Section
18
was
situated
1.5
miles
east
of
the
corporate
limits
of
the
City,
while
the
western
boundary
of
Section
18
was
a
distance
of
two
miles
from
the
City.
The
south
property
line
is
adjacent
to
the
north
side
of
Saskatchewan
Interprovincial
Highway
16.
The
property
is
accessible
from
Highway
16
on
the
south;
from
a
gravel
surfaced
road
allowance
on
the
east
and
on
the
west
from
an
asphalt
surfaced
roadway
adjacent
to
the
railroad
trackage
which
traverses
diagonally
through
the
northeast
corner
of
Section
17.
These
rail
and
road
allowances
bisect
the
subject
property
from
northwest
to
southeast.
A
pipeline
right-of-way
crossing
runs
in
an
east-west
direction
through
the
south
portion
of
the
subject
property.
There
are
some
low
lying
areas
and
small
sloughs
scattered
throughout
the
subject
lands
other
than
in
the
southeast
quarter
of
Section
17.
The
estimated
total
number
of
cultivated
acreas
within
the
subject
property
was
709
or
approximately
98
per
cent
of
its
total
area.
At
the
effective
date
the
subject
property,
as
well
as
neighbouring
properties,
were
totally
utilized
in
agricultural
pursuits.
Farming
enterprises
in
the
area
included
dairy
farms,
beef
cattle
operations
and
cereal
grain
production.
There
was
some
residential
acreage
development
with
associated
hobby
farm
operations.
A
triangulated
corner
of
an
adjacent
land
parcel
located
on
the
eastern
boundary
of
the
subject
land
is
utilized
as
a
site
for
a
trucking
depot
and
a
commercial
greenhouse.
This
site
is
bound
by
Highway
16
on
one
side
and
by
the
railroad
on
another.
During
the
relevant
period
of
time
the
Rural
Municipality
of
Corman
Park
and
the
City
of
Saskatoon
were
parties
to
an
agreement
which
effectively
precluded
any
further
subdivision
of
agriculturally
zoned
properties
on
the
periphery
of
Saskatoon
into
small
acreage
holdings.
This
agreement
affected
the
subject
lands.
The
zoning
regulations
in
force
at
the
relevant
time
would
also
have
precluded
small
acreage
subdivision
and
development.
The
subject
property
is
located
close
to
the
City.
It
is
common
ground
that
this
City
was
one
of
the
fastest
growing
in
Canada
in
the
19605.
There
was
a
substantial
increase
in
the
population
in
those
years
due
primarily
to
the
influx
of
construction
workers
to
develop
and
service
the
potash
mines
surrounding
Saskatoon.
In
that
period
of
time
there
was
tremendous
optimism
as
to
the
future
effect
of
the
potash
industry
on
the
local
economy.
As
matters
transpired,
although
Saskatoon
did
become
a
major
supply
and
service
centre
for
some
seven
of
the
ten
mines
in
the
area,
potash
mining
did
not
have
as
great
an
impact
as
expected.
The
first
mine
site
was
completed
in
1965
and
the
following
years
saw
the
completion
of
construction
on
the
other
sites.
The
end
of
the
building
occurred
in
the
1960s
at
approximately
the
same
point
of
time
when
the
national
economy
was
entering
a
period
of
depression.
The
convergence
of
these
factors
as
well
as
poor
economic
conditions
within
the
agricultural
and
potash
industries
led
to
a
marked
slowdown
in
Saskatoon's
growth
in
1969
and
1970.
All
of
the
expert
witnesses
agreed
that
the
area's
economic
growth
dropped
drastically,
coming
to
a
virtual
standstill
in
1970,
and
all
agreed
that
by
the
end
of
1971
and
early
1972
some
improvement
could
be
seen.
According
to
Mr.
Chyz
the
recessive
trend
levelled
in
1970
with
some
evidence
of
reversal
in
1972.
Mr.
Helmers
saw
this
period
of
time
as
showing
some
improvement
without
much
optimism
for
the
immediately
following
years.
To
properly
assess
the
impact
of
these
economic
conditions
on
land
values
and
sales
at
the
relevant
time,
it
is
necessary
to
take
into
account
the
unique
land
banking
system
practised
by
the
City
for
a
number
of
years
and
its
overall
impact
on
residential
and
commercial
development.
As
a
result
of
a
number
of
historical
factors,
including
the
1930s
depression
and
the
beginning
of
the
Second
World
War,
the
City
became
the
owner
of
a
substantial
number
of
building
sites,
title
to
which
had
been
surrendered
to
or
otherwise
acquired
by
the
City
over
the
years.
It
appears
that
at
that
time
comparatively
little
privately
owned
land
for
development
purposes
remained
within
the
City’s
limits.
Following
the
Second
World
War
there
was
an
increase
in
the
housing
shortage
which
led
to
a
substantial
drain
on
the
City’s
inventory
of
tax
title
property
and
City
Council
was
faced
with
a
decision
regarding
future
land
involvement.
This
led,
in
the
early
1950s,
to
a
decision
by
the
City
to
purchase
raw
land
for
development.
Its
priorities
in
so
doing
were
orderly
future
growth,
reduction
of
speculation
and
the
maintenance
of
low
land-values
to
encourage
new
house
building.
Mr.
W.E.
Wellman,
Director
of
Planning
and
Development,
City
of
Saskatoon,
in
1971,
a
witness
called
by
the
appellant,
stated
that
since
the
inception
of
the
land
banking
system:
Development
of
privately
owned
land
had
been
traditionally
the
exception
rather
than
the
rule.
It
is
estimated
that
about
80
percent
of
the
new
residential
development
had
taken
place
on
City
owned
land.
During
the
boom
cycle
in
the
early
1960s
the
City
became
very
actively
involved
in
the
acquisition
of
peripheral
land
for
future
development.
During
the
intensive
land-buying
period
ending
in
1969
the
City
acquired
approximately
7,000
acres
of
land
for
residential,
industrial
and
commercial
development,
both
within
and
beyond
the
municipal
boundaries.
As
a
result
of
this
land
acquisition
the
City
was
described
as
the
major
real
estate
developer
and
seller
of
property
in
that
province.
This
program
came
to
an
abrupt
halt
in
the
years
between
1968
and
1974.
In
fact
there
were
no
land
acquisitions
by
the
City
whatsoever
from
1970
to
1974.
In
a
study
undertaken
for
the
City
of
Saskatoon
Ravis
noted
that
from
1961
to
1969
residential
construction
in
the
City
averaged
800
to
900
single
family
dwellings
per
year,
with
a
decline
to
approximately
400
units
per
year
since
1969.
The
bulk
of
this
development
took
place
on
City
owned
land.
Despite
these
large
land
sales
the
City
as
at
May
1973,
the
date
of
the
aforementioned
study,
still
had
enough
land
available
to
meet
building
requirements
for
the
next
20
years.
The
significance
of
this
land
acquisition
program
is
its
effect
on
land
speculation
and
the
acquisition
of
development
property
by
private
developers.
According
to
Ravis
there
were
only
five
major
private
land
developments
in
the
City
between
the
early
1950s
and
1972-73.
As
well,
in
areas
where
private
development
is
adjacent
to
city
owned
land,
the
City
as
a
general
rule
entered
into
a
development
agreement
making
it
mandatory
for
the
developer
to
install
within
the
limits
of
his
development
area
exactly
the
same
type
and
quality
of
services
as
those
provided
by
the
City.
I
now
turn
to
the
evidence
of
the
three
appraisers
and
in
particular
to
their
conclusions
as
to
the
highest
and
best
use
of
the
subject
property.
In
assessing
their
conclusions
it
is
necessary
to
consider
the
effect
of
the
economic
downturn;
population
growth
trends;
the
direction
of
development
in
the
City
of
Saskatoon;
the
location
of
the
property
and
its
acces-
sbility;
and
the
time
frame
proposed
for
the
attainment
of
the
highest
and
best
use
potential
of
the
subject
property.
In
the
context
of
this
particular
appeal
the
extensive
and
long-standing
land
acquisition
program
carried
on
by
the
City
also
plays
a
major
role,
since
the
concept
of
highest
and
best
use
clearly
involves
a
consideration
of
the
length
of
time
that
a
prudent,
informed
investor
would
reasonably
be
expected
to
hold
a
property
for
future
development.
It
was
generally
agreed
that
at
some
point
of
time
in
the
future
it
was
reasonable
to
expect
that
the
subject
property
would
be
absorbed
into
the
City
and
developed.
There
was,
however,
marked
disagreement
between
the
appraisers
as
to
when
this
would
occur
and
therein
lies
the
crux
of
the
issue
before
the
Court.
Ms.
Dyck
appraised
the
subject
property
at
$725,000
($1,000
per
acre)
as
at
December
31,
1971.
In
reaching
this
conclusion
Ms.
Dyck
emphasized
the
fact
that
in
1969
the
City
of
Saskatoon
had
sufficient
land
to
meet
building
requirements
for
the
next
20
years.
In
her
view
the
economic
recession
in
1969
and
1970
led
to
a
slowdown
of
growth,
and
it
was
her
opinion
that
by
the
end
of
1971
and
early
1972
the
economy
was
beginning
to
recover.
Although
located
in
Corman
Park,
one
and
one-half
miles
east
of
the
City
limits,
and
although
the
land
use
in
1971
was
agricultural,
it
was
her
opinion
that
the
property,
being
under
development
control
by
both
the
Rural
Municipality
of
Corman
and
the
City
of
Saskatoon,
was
subject
to
urban
influences,
including
a
demand
for
acreages
and
highway
commercial
properties.
It
was
her
evidence
that
since
1971
the
growth
of
the
City
has
been
on
the
east
side
in
the
direction
of
the
land
in
question.
In
her
opinion
therefore
the
highest
and
best
use
of
the
subject
lands
would
be
future
urban
development,
a
use
that
was
foreseeable
as
at
December
31,
1971.
She
expressed
the
view
that
the
land
would
be
“in
a
holding
pattern
in
its
present
use
as
agricultural
land
until
the
market
warrants
urban
development".
A
review
of
her
appraisal
report
and
of
her
testimony
leads
to
the
conclusion
that
Ms.
Dyck
relied
far
too
extensively
on
information
which
was
not
available
as
at
December
31,1971
and
on
subsequent
events
which
could
not
at
that
time
reasonably
have
been
anticipated
to
occur.
For
example
she
referred
to
the
fact
that
the
subject
properties
were
included
in
a
City
development
plan
in
1975
and
were
slated
for
possible
development
in
the
mid
19805.
Since
the
City
tended
to
purchase
land
10
to
20
years
in
advance
of
development,
she
drew
the
conclusion
that
“If
development
of
the
subject
properties
would
have
occurred
in
the
mid
1980s
the
subject
properties
would
conceivably
have
been
purchased
sometime
in
the
mid
1960s
to
mid
19705.
The
logic
of
such
reasoning
escapes
me.
It
is
clear
from
Ms.
Dyck's
own
observations
that
the
subject
property
was
not
in
the
City’s
plans
as
at
1971.
One
might
speculate
that
at
some
time
in
the
future
the
City
might
revise
its
plans
to
include
the
subject
property
but
that
is
all.
What
is
apparent,
however,
is
that
Ms.
Dyck
formed
her
opinion
by
looking
backward
from
1975
and
considered
as
relevant
to
her
conclusion
plans
which
were
then
in
place
but
which
did
not
exist
in
1971.
In
her
estimate
of
value
two
comparables
commended
themselves
to
her.
She
stated
they
were
the
best
indicators
of
value
of
the
subject
property:
.
.
.
as
only
a
portion
of
these
lands
had
been
developed
and
are
in
close
proximity
to
the
subject
properties.
As
well
sales
that
have
occurred
subsequent
to
the
effective
date
and
as
late
as
1976
were
properties
acquired
by
the
City
and
the
northeast
indicated
land
prices
have
not
changed
significantly.
[Emphasis
added.]
Ms.
Dyck's
evidence
was
replete
with
other
references
to
post-1971
events.
When
this
issue
was
raised
Ms.
Dyck,
in
response
to
a
direct
question,
agreed
that
she
based
her
appraised
value
on
such
information,
stating:
"I'm
basing
(it)
by
information
on,
to
some
extent,
a
little
after
1971."
When
asked
"From
what
time
frame
have
you
based
the
information
in
order
to
come
up
with
the
values
of
the
subject
land?”
her
response
was
"From
1968
to
1974.”
She
was
then
directed
to
references
in
her
appraisal
report
to
a
1987
City
of
Saskatoon
development
plan
and
was
asked
whether
she
utilized
information
from
that
plan
in
the
appraisal.
Her
response
was:
Yes
I
did
discuss,
as
I
discussed
in
the
other
comparables
have
been
developed
[sic],
subsequent
to
City
purchases,
Lawson
Heights,
parts
of
it
now
form
Lawson
Heights
and
so
on.
With
respect
to
the
comparables
used
by
Ms.
Dyck
I
note
that
the
prices
varied
from
$437
to
$2,271
per
acre.
Her
opinion
was
that
the
value
of
the
subject
property
was
"between
these
two
figures".
In
my
view
she
failed
to
satisfactorily
explain
how
she
arrived
at
her
figure
of
$1,000
per
acre.
She
provided
no
adjustment
figures
and
her
reasons
for
concluding
that
development
potential
was
foreseeable
in
1971
were
not
compelling.
Her
failure
to
distinguish
in
terms
of
value
that
portion
of
the
property
lying
to
the
east
of
the
railroad
tracks
from
the
portion
to
the
west
of
the
railroad
tracks
also
tends
to
reduce
the
validity
of
her
opinion.
The
opinion
of
Mr.
Chyz
was
that
the
subject
property
was
“in
an
impending
transitional
state".
The
fact
that
as
a
general
rule
the
City
land
banking
system
provided
for
the
acquisition
and
maintenance
of
an
inventory
level
of
undeveloped
land
to
satisfy
15
to
20
years
of
requirements
led
him
to
conclude
that
it
was
reasonable
that
the
subject
property,
at
the
effective
date,
could
be
absorbed
by
the
urban
sprawl
within
a
similar
time
period.
In
his
appraisal
report
he
stated:
The
area
of
the
subject
property
located
to
the
west
of
the
railroad
trackage
had
one
and
one-half
miles
of
direct
frontage
on
Saskatchewan
Highway
#16
—
the
Yellowhead
(interprovincial)
route.
A
strip
of
land
in
this
area
has
a
high
potential
for
development
with
retail/highway
commercial
occupancy
facilities.
Considering
the
total
land
area
of
the
parcel,
a
section
thereof
could/should
be
utilized
in
accommodating
a
service
oriented
industrial
employment
center.
The
interior
of
the
parcel
will
in
due
course
be
absorbed
by
varied
density
residential
accommodation.
The
time
frame
for
subdivision,
servicing,
marketing
and
development
of
this
land
area
can
be
highly
variable,
subject
to
influences
arising
from
extraneous
sources.
The
land
area
to
the
east
of
railroad
trackage
could
have
a
more
deferred
developmental
period.
The
absorption
time
frame
will
be
totally
dependent
on
the
physical
location
of
the
pipeline
networks
for
the
land
area
to
the
west
of
the
trackage.
This
land
area
will
in
due
course
be
absorbed
by
the
urban
sprawl
as
a
location
for
either
industrial
or
residential
pursuits.
He
concluded
that
the
highest
and
best
use
of
the
subject
property
was
for
continued
use
in
the
production
of
cereal
grain
crops
pending
absorption
by
urban
development.
I
note
that
in
making
his
final
estimate
of
value
Chyz
took
into
account
the
effect
of
the
railway
right-of-way
and
valued
the
approximately
73
acres
which
lay
to
the
northeast
of
the
right-of-way
at
some
$750
per
acre
less
than
the
remaining
acreage.
On
the
evidence
before
the
Court
the
distinction
between
the
two
parcels
is
well
warranted.
Chyz
valued
each
of
the
five
parcels
of
land
comprising
the
subject
property
and
arrived
at
a
total
value
of
$823,750
($1,125
per
acre).
I
accept
Chyz's
conclusion
that
the
subject
properties
were
in
"an
impending
transitional
state".
There
is
little
dispute
as
to
his
statement
that
the
City
attempted
to
maintain
an
inventory
level
of
undeveloped
land
to
satisfy
15-20
years
of
requirements.
However
I
do
not
accept
as
reasonable
his
conclusion
"that
the
subject
property
at
the
effective
date
could
be
absorbed
by
the
urban
sprawl
within
a
similar
time”.
There
is
no
cogent
factual
basis
for
that
conclusion.
His
statement
that
the
land
area
situated
to
the
west
of
the
railroad
trackage
was
annexed
by
the
City
of
Saskatoon
in
1982
is
retrospective
and
unacceptable
in
cases
of
this
type.
In
determining
value
Mr.
Chyz
looked
to
urban
developed
properties
and
chose
eight
sales
for
comparison
purposes.
Of
these
comparables
those
referred
to
as
4,
5
and
6
were
sales
so
removed
in
time
(1965,1975
and
1979
respectively)
as
to
be
of
little
or
no
use.
Indeed
Chyz
was
candid
in
stating
that
the
data
relative
to
these
comparables
was
utilized
to
provide
an
indication
of
inflationary
trends
and
could
not
be
used
to
establish
the
value
of
the
subject
property.
I
note
as
well
that
with
respect
to
two
of
these
comparables
Chyz
stated
that
the
properties
were
scheduled
for
subdivision
servicing
and
marketing
in
1984
or
1985,
factors
which
could
not
have
been
within
his
knowledge
as
at
December
31,
1971.
Comparables
7
and
8
are
located
in
a
very
"deferred
development
potential
area",
and
were
relevant
only
to
that
portion
of
the
subject
property
situated
to
the
east
of
the
railway
right-of-
way.
These
comparables
add
little
to
his
appraisal.
Mr.
Chyz
relied
principally
upon
comparables
1,
2
and
3
as
being
the
best
indicators
of
the
value
of
the
subject
property.
In
considering
his
evidence
and
his
report
with
respect
to
these
sales
I
was
struck
by
the
fact
that
Chyz
also
appears
to
have
been
influenced
to
an
unacceptable
extent
by
events
which
occurred
as
late
as
1984.
For
example
with
respect
to
comparable
1
he
states:
Information
indicates
that
portions
of
the
land
area
will
be
serviced
during
1984,
with
possibility
that
construction
will
commence
this
year.
The
land
has
been
"banked"
for
a
16
year
period.
He
goes
on
to
say:
There
is
a
very
high
degree
of
possibility
that
a
time
lapse/development
deferral
period
for
the
subject
will
very
closely
approximate
that
of
the
comparable.
With
respect
to
comparable
3
he
comments
that
it
was
acquired
by
the
City
in
1968
and
was
fully
absorbed
by
development
in
1978.
Although
in
his
analysis
Chyz
notes
that
some
of
the
plans
and
market
conditions
could
not
have
been
foreseen
at
the
effective
date,
it
still
seems
obvious
that
subsequent
events
materially
influenced
Chyz
and
led
to
his
selection
of
these
comparables
as
reliable
indicators
of
value
for
the
property
under
appraisal.
Another
vexing
factor
is
that
the
comparables
selected
by
him
reflect
sales
of
land
which
took
place
during
a
peak
period
in
the
real
estate
market
and
at
a
point
of
time
when
the
City
was
very
actively
involved
in
the
acquisition
of
property
for
its
land
bank.
Chyz
glosses
over
the
fact
that
there
were
no
purchases
by
the
City
whatsoever
from
1968
to
1974
and
discounts
the
fact
that
a
number
of
developers
and
speculators
were
attempting
to
sell
their
holdings
to
the
City
of
Saskatoon
at
the
relevant
period
of
time.
The
fact
is
that
there
were
no
purchasers
for
the
land
in
1971.
Chyz's
conclusion
as
to
value
based
as
it
is
in
great
part
on
prices
willing
buyers
were
prepared
to
pay
for
roughly
similar
lands
in
an
earlier
and
very
active
market
does
not
in
my
view
accurately
reflect
the
value
of
the
subject
property
as
at
December
31,
1971.
Mr.
Helmers'
evidence
was
that
in
1971
and
for
several
years
before
and
after,
due
to
the
recessionary
economic
trend,
the
City
had
effectively
become
the
sole
potential
customer
for
peripheral
lands.
Helmers
noted
that
in
1971
the
City
amended
a
1966
Community
Planning
Scheme
by
deleting
therefrom
a
number
of
peripheral
areas
from
its
future
development
plans.
This
provincially
required
review
saw
lands
in
the
north
and
west
sectors
of
Saskatoon
added
to
the
1966
planning
scheme
and
acreage
in
the
southeast,
which
had
been
the
previously
expected
growth
area
for
future
residential
development,
was
deleted.
This
fact
was,
in
his
view,
significant
in
that
this
was
the
exact
area
in
which
the
subject
properties
are
situated.
It
was
Helmers'
opinion
that
the
planners
had
taken
these
steps
to
ensure
that
residential
development
was
equally
available
in
all
sectors
of
the
City
rather
than
flowing
in
one
direction.
Helmers
stated
that
the
acreage
deleted
was
greater
than
that
added,
confirming
his
view
that
future
growth
of
the
City
would
not
be
as
quick
as
had
been
projected
in
1966.
A
search
of
land
titles
registrations
by
Helmers
disclosed
no
arm's
length
transactions
on
larger
tracts
of
peripheral
land
at
the
relevant
time.
This
fact
combined
with
offers
by
developers
and
speculators
to
sell
their
holdings
to
the
City
effectively
made
the
City
the
only
hope
of
obtaining
speculative
values
for
peripheral
lands.
He
referred
to
minutes
of
a
District
Planning
Commission
meeting
and
to
discussions
he
had
with
Mr.
Wellman
and
concluded
that
in
1971
"unless
the
speculators
offered
the
periphery
lands
with
exceptional
terms
or
prices
equal
to
farm
land
values
no
purchases
would
be
considered”
by
the
City.
These
facts
coupled
with
his
assumption
that
the
City
banked
sufficient
lands
to
adequately
meet
its
requirements
for
the
next
20
years
led
him
to
conclude
that
the
likelihood
of
annexation
within
a
reasonably
foreseeable
period
of
time
was
so
remote
as
to
have
reduced
the
speculative
value
of
the
property
substantially.
It
was
his
opinion
that
the
highest
and
best
use
of
the
subject
farm
lands
would
have
been
to
continue
their
existing
use
as
an
agricultural
endeavor.
Based
on
this
conclusion
Mr.
Helmers
estimated
the
market
value
of
the
subject
property
to
be
$176
per
acre
or
$127,000
(rounded
off)
as
at
December
1,
1971.
The
determination
of
fair
market
value
of
land
is,
at
the
best
of
times,
a
difficult
task.
In
this
case
the
difficulties
are
compounded
by
the
extremely
wide
divergence
of
opinion
as
to
the
time
span
within
which
the
subject
property
might
reach
the
development
stage.
This
divergence
led
Helmers
and
Chyz
in
opposite
directions
in
their
search
for
appropriate
comparables.
Since
Helmers'
highest
and
best
use
was
to
continue
the
existing
use
of
the
land
for
agricultural
endeavours,
he
selected
purely
agricultural
properties
as
comparables.
All
were
considered
solely
for
their
agricultural
capability,
and
indeed
the
comparable
selected
by
Mr.
Helmers
as
the
closest
indicator
of
fair
price
for
the
subject
property,
was
selected
because
it
required
the
least
adjustment
for
general
agricultural
capability
and
discounted
completely
the
factor
of
proximity.
In
reaching
his
conclusion
that
in
1971
the
absorption
of
the
subject
property
into
the
City’s
limits
was
long
term
in
nature
he
relied
on
the
fact
that
in
1971
it
was
not
included
within
future
planning
boundaries
thought
sufficient
to
accommodate
a
population
of
550,000.
This
population
figure,
according
to
Helmers'
calculations,
would
take
anywhere
from
38
to
75
years
to
reach.
In
the
course
of
cross-examination
it
became
apparent
that
the
data
utilized
by
him
and
the
conclusions
he
reached
with
regard
to
population
growth
were,
to
say
the
least,
seriously
flawed.
As
a
result
his
determination
of
highest
and
best
use
must
be
seriously
questioned.
Evidence
was
also
adduced
from
Mr.
H.E.
Wellman,
since
1970
the
Director
of
Planning
and
Development
for
the
City
of
Saskatoon.
Prior
to
that
time
he
was
the
City
Planner
and
Building
Director,
and
has
been
actively
involved
with
Saskatoon
planning
and
development
since
1963.
Mr.
Wellman
told
the
Court
that
the
City
anticipated
its
land
requirements
and
attempted
to
buy
land
“within
a
10
to
15
year
advance
time
frame,
although
there
are
some
holdings
that
we
have
that
would
be
developed
in
a
later
period
than
that”.
Mr.
Wellman
testified
that
the
District
Planning
Agreement
required
the
Rural
Municipality
of
Corman
to
have
by-laws
which
were
complementary
to
those
of
the
City
of
Saskatoon,
these
by-laws
were
designed
to
discourage
random
urban
development
just
outside
the
City
limits.
With
respect
to
the
area
which
subject
properties
were
located
the
City
would
have
done
everything
it
could
have
done
to
discourage
the
division
of
that
property
into
small
acreages
for
building
purposes.
To
permit
five
or
ten-acre
parcels
or
small
holdings
in
those
areas
would
have
made
eventual
urban
development
extremely
difficult.
To
this
extent
Mr.
Wellman
agreed
that
it
was
fair
to
say
that
the
City
saw
the
subject
lands
as
“potential
city
growth
lands".
With
respect
to
future
development
of
the
block
of
land
on
the
southeast
corner
of
the
City
of
Saskatoon,
which
included
the
subject
properties
in
its
most
western
aspect,
Mr.
Wellman
said
that:
“In
1971
it
would
have
been
seen
as
a
fair
number
of
years
away
from
development."
In
terms
of
the
desirability
of
the
subject
property
for
acquisition
by
the
City
in
1971
Mr.
Wellman
stated:
I
think
if
it
had
been
offered
to
us,
or
if
we
had
been
able
to
negotiate
it
at
what
I
call
farmland
prices,
which
might
have
been
in
the
$200
to
$500
an
acre
range,
we
would
have
probably
acquired
it.
I
know
we
did
have
some
discussion
within
the
office
about
the
desirability
of
acquisition,
and
we
were
informed
that
the
asking
price
was
higher
than
what
we
considered
we
were
prepared
to
pay.
I
found
Mr.
Wellman's
evidence
most
helpful
and
accept
his
opinions
and
views
in
preference
to
those
of
the
appraisers
called
by
both
parties.
I
have
concluded
that
the
subject
lands
were
in
the
path
of
future
development
and
that
given
the
City’s
land
acquisition
program
would
have
been
of
interest
to
it
at
some
point
of
time.
For
this
and
the
reasons
previously
expressed
I
reject
Mr.
Helmer's
opinion
that
the
potential
of
the
subject
lands
for
such
acquisition
and
development
was
so
far
in
the
future
as
to
be
non-existent.
On
the
other
hand
I
cannot
accept
the
opinions
of
Mr.
Chyz
and
Ms.
Dyck
that
in
1971
one
could
have
anticipated
development
of
the
subject
lands
within
15
or
20
years.
Indeed
Mr.
Wellman,
speaking
for
the
City,
stated:
"We
would
have
known
in
1971
that
this
property
would
not
be
developed
within
15
years,”
and
"that
ultimate
land
use
for
the
subject
properties
would
not
even
have
been
considered
in
1971".
In
his
view
at
the
relevant
time,
"We
would
not
have
any
anticipation
of
subdivision.”
At
best,
he
said,
"Perhaps
it
would
have
been
developed,
certainly
in
the
fullness
of
time.”
While
Wellman's
opinion
as
to
when
the
subject
properties
might
be
considered
for
acquisition
is
not
as
far
removed
as
Helmers'
estimate
of
38
to
75
years,
it
lends
no
support
to
the
conclusions
reached
by
the
appellant's
appraisers.
In
summary
I
do
not
accept
Mr.
Helmers'
valuation
since
it
is
premised
on
an
ongoing
agricultural
use
of
the
land
for
the
foreseeable
future,
a
view
which
I
deem
to
be
wrong.
On
the
other
hand,
I
cannot
accept
the
appellant's
appraiser's
conclusions
as
to
value
because
they
are
based
on
a
highest
and
best
use
as
a
future
residential
development,
not
in
the
fullness
of
time
but
within
a
narrow
time
frame
of
15
or
so
years.
These
conclusions
are
not
in
accord
with
the
evidence
before
me.
The
onus
is
on
the
appellant
to
destroy
the
Minister's
assessment.
I
have
no
hesitation
in
saying
that,
in
this
appeal,
there
is
evidence
which
satisfies
me
that
the
Minister's
assessment
with
respect
to
the
highest
and
best
use
of
the
subject
property
was
flawed.
The
evidence,
however,
fails
to
satisfy
me
that
the
appellant's
proposed
fair
market
value
of
$1,344
per
acre
is
reasonable.
It
is
well
established
that
such
retrospective
evidence
is
generally
not
admissible
in
reaching
a
notional
valuation
conclusion.
Only
evidence
of
facts
occurring
after
December
31,1971
which
were
at
that
time
reasonably
predictable
and
likely
to
have
been
considered
by
an
objective
purchaser
or
seller
should
be
taken
into
consideration.
There
was
a
marked
tendency
on
the
part
of
the
appraisers
called
on
behalf
of
the
appellant
to
have
considered
material
which
was
not
available
as
at
December
31,
1971.
The
fact
remains
that
at
the
relevant
point
of
time
there
was
no
market
for
vacant
lands
such
as
the
subject
property.
Speculators
and
developers
were
in
many
instances
moving
to
divest
themselves
of
their
holdings.
Although
the
economic
recession
had
"bottomed
out”
there
is
no
evidence
before
me
which
would
suggest
that
a
knowledgeable
willing
purchaser
acting
at
arm's
length
would
have
had
the
prescience
to
know
that
in
1974
or
1975
land
values
would
once
again
approach
the
inflated
price
of
1968
and
act
on
that
basis.
In
my
view
the
appellant's
expert's
evidence
was
tainted
by
such
retrospective
evidence.
No
other
evidence
has
been
presented
to
lend
substantive
support
to
the
appellant's
claim
of
$1,200
per
acre.
The
argument
that
the
appellant
would
not
have
accepted
less
than
that
price
for
the
property
during
the
relevant
period
of
time
is
no
substitute
for
arriving
at
the
proper
value
to
be
assumed
between
a
willing
buyer
and
a
willing
seller
(even
though
events
proved
the
appellant
was
wise
to
hold
the
land).
The
absence
of
a
willing
buyer
at
that
price
or
indeed
at
any
price,
substantially
undermines
the
appellant's
position.
It
follows
that
there
is
no
evidence
which
would
permit
me
to
accept
with
confidence
either
of
the
parties'
opinions
as
to
the
value
of
the
subject
lands.
In
Bibby
Estate
v.
The
Queen,
[1983]
C.T.C.
121
at
131;
83
D.T.C.
5148
at
5157
Mr.
Justice
Walsh
stated:
While
it
has
frequently
been
held
that
a
Court
should
not,
after
considering
all
the
expert
and
other
evidence
merely
adopt
a
figure
somewhere
between
the
figure
sought
by
the
contending
parties,
it
has
also
been
held
that
the
Court
may,
when
it
does
not
find
the
evidence
of
any
expert
completely
satisfying
or
conclusive,
nor
any
comparable
especially
apt,
form
its
own
opinion
of
valuation,
provided
this
is
always
based
on
the
careful
consideration
of
all
the
conflicting
evidence.
The
figure
so
arrived
at
need
not
be
that
suggested
by
any
expert
or
contended
for
by
the
parties.
Taking
all
of
the
evidence
into
consideration
I
find
the
value
of
the
subject
properties
to
be
$600
per
acre.
In
so
doing
I
have
taken
into
account
Mr.
Wellman's
evidence
that
that
City
would
have
been,
notwithstanding
the
economic
conditions,
prepared
to
pay
between
$200
and
$500
per
acre
for
such
property
had
it
been
offered
at
that
price.
It
is
also
of
some
interest
that
the
respondent
reassessed
at
$320
per
acre,
a
sum
somewhat
higher
than
the
value
presented
by
his
own
appraiser.
I
have
also
taken
into
account,
in
a
general
way,
the
fact
that
the
73
acres
lying
to
the
east
of
the
railway
right-of-
way
should
not
be
valued
on
the
same
basis
as
the
portions
lying
to
the
west
thereof.
In
Chartrand
v.
Canadian
National
Railway
Co.,
16
L.C.R.
193
at
203-204
the
Court
stated:
.
.
.
there
is
some
validity
to
defendant's
arguments,
moreover,
that
a
developer
would
not
pay
a
great
deal
more
than
the
value
as
farm
land
for
a
development
potential
15
or
20
years
later.
These
comments
are
relevant
to
the
case
at
bar.
There
was
in
my
view
some
“speculative”
value
in
the
subject
lands
and
I
have
attempted
to
make
some
allowance
for
that
fact.
I
do
not
believe
it
was
entirely
eliminated
by
the
recession.
The
appeal
is
allowed
and
the
matter
is
referred
back
to
the
Minister
for
reassessment
of
the
appellant's
capital
gain
on
the
disposition
of
the
property
on
the
basis
that
its
fair
market
value
as
at
December
31,1971
was
$600
per
acre.
Since
the
appellant
was
substantially
successful
it
is
entitled
to
costs
to
be
taxed.
Appeal
allowed.
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